There is no doubt that the current business climate is challenging for all companies. Zero revenue, aging receivables, payables, salaries draining cash reserves, loans not being granted and investors circling wagons and seeking loss mitigation.
Difficult times. No magical answers. I live in Upstate NY, and who knows when businesses will be allowed to open again.
Here is what I do know. This too will pass, and business will be allowed to start again some time (soon).
Here is where early and late stage can be alike: Project management planning - Ghant charts, milestones, proformas, market analysis. Now is the time to adopt simple PM processes. Mature companies must think like a startup. What will you need to ramp your business back up? How much cash will you need? What is your Burn Rate? What needs to be done to the equipment to get it ready for production. What does your supply line look like, and what will your marketplace look like? Will Demand be strong or weak? What does the market look like for the next 3, 6, 12 months? Who among your competitors might be vulnerable and open to acquisition? Who may be knocking on your door?
Opportunities for growth occur in every market, even in this current mess.
I always liked the term opportunistic. I have started multiple companies, because I noticed an opportunity within a defined market that I believed I could exploit.
Twenty (plus) years ago, there was less data and I relied more on tribal knowledge. Yet, I always did my due diligence. Admittedly, I relied more on tribal knowledge. In other words, I trusted my gut instincts.
I have learned many lessons over the last two+ decades. I have made mistakes. Ironically, I made the mistakes with my own money, and never for a client or an employer.
Growth doesn't just happen. It doesn't matter if it is organic, accretive or innovative. Growth must be tactical and strategic.
I still trust my instincts, but I back it up with lots of data now that fit into the actionable strategic plan, which results in predictable financial models. Lessons learned.
We are currently in uncertain times. Likely ripe with new opportunities. While many are expounding doom and gloom, I am sure that there will be a few of us that will see new opportunities, new needs to be fulfilled, challenges to be faced and overcome.
Communication 101
Like you, my news feeds are always full of early stage – mature business articles. One LinkedIn article that popped up yesterday was about the employment market and the top skill desired for executive level talent is, Communication.
Effective communication is definitely a skill set. Effective and skilled communication starts with the following:
• Effective listening
• Knowing your audience
• Knowing your material
• Gaining acceptance of the conversation
I used to think I was a great communicator. What I really was amazing at, was downloading. I could download encyclopedias of information. I am the idiot that would tell people how to build a clock, when they only wanted to know what time it was.
This is one of the reasons why I begin with effective listening. What is the reason behind the conversation. What information is being conveyed. Who is it being conveyed to. This is the nuance.
Communication while acting as a manager, who would be delegating tasks, is much different then communicating as a Leader who developing a dynamic team. Operational conversations have a much different tone then when Ideating over a strategic initiative. A good executive knows the differences and adjusts how they communicate accordingly.
Making a memory - and some syrup
I posted this a year ago. Seems more relevant today:
I love winter. I also love when spring comes. As a kid on a dairy farm, sugaring was a favorite time. Fond memories with my Dad. Time passed, we moved off the farm, I moved to NYC, times change. Farm kid becomes finance and M&A kid. I moved back to rural NY, have kids now and for more than 15 years, have tapped the trees in my back yard.
My children (who refused to be in the photo) are still young. We all work together bringing in the sap and boiling it down to make syrup. Making memories. I hope that they will look back on this time with the same fondness when they are adults, and maybe continue the tradition.
I fix broken companies, I make good companies grow, and I have a passion for the art of the deal. Sometime this takes me away from home for a bit of time. One thing I learned early on:
You never have a second chance to make a memory. Go make some today.
The Good Ole Days
I am saddened to say, that I have now reached the age, where I am sounding very much like my father and Grandfather before me. Scary thing that.
I am a farm kid that left the farm, but I still try to live like I grew up. I have a rather large garden, I can what I grow. I make my own beer, and occasionally, hard cider. I heat my house with a very highly efficient wood/oil furnace. I used to go into the woods, and harvest the wood myself, but got lazy and just order a load of logs to be delivered. My kids and I cut the wood, split and stack each summer for the winter. I live where it is cold. Nothing like wood heat in the winter.
As a kid I remember running downstairs to get close to the woodstove, cause the upstairs was frigging cold. Now, I just load the firebox, and wait for the unit to work its magic. We all walk around in shorts and t-shirts.
Things are better, easier, faster today. I believe there is tremendous value in doing somethings the “old” way. Teaching what you learned, passing on generational knowledge. It’s a warm feeling.
If you don't currently follow Steve Blank- you should
Another great blog from Steve. Things to consider during these challenging days to come. Note to A CFO
Begin at the exit
I have written a few blogs about pitches for investment. Your pitch (all your documents combined) must read like a novel. You are telling a story to investors that you have a plan to create / grow / exit an investment. You are going to create a solid investment by deploying capital (monetary and intellectual) in such a fashion that creates a strong and viable company that will grow in value, in a defined period of time.
What everyone seems to overlook is this simple fact; You are not pitching your company. You are pitching an investment. You MUST concentrate on these facts. What do you need ($$)? How will you use it? What effect will the $$ have on the company? Can management do it? Exit strategy and timeline? If these segments are not perfectly clear on every piece of media, then your chance of a meeting, let alone an investment are minimized.
Who is your Exit buddy? Do they like you? Is the pool of Exit buddies in the single digits or are there hundreds of potential Exit buddies? Have you spoken to any? Market research, multiples, comparables.
If you seek investment, please change your mindset to the following: “Our team’s goal is to create a sold company that will grow to provide a quality return to our investors.” WIFFM.
Opportunity knocks
I always liked the term opportunistic. I have started multiple companies, because I noticed an opportunity within a defined market that I believed I could exploit.
Twenty (plus) years ago, there was less data and I relied more on tribal knowledge. Yet, I always did my due diligence. Admittedly, I relied more on tribal knowledge. In other words, I trusted my gut instincts.
I have learned many lessons over the last two+ decades. I have made mistakes. Ironically, I made the mistakes with my own money, and never for a client or an employer.
I have learned that being “opportunistic” is not a good as being strategic or tactical. I have come to learn that when a company, Fund or Family Office states they are “opportunistic buyers”, it usually means they have no clearly defined strategy.
Growth doesn't just happen. It doesn't matter if it is organic, accretive or innovative. Growth must be tactical and strategic.
I still trust my instincts, but I back it up with lots of data now that fit into the actionable strategic plan, which results in predictable financial models. Lessons learned.
How do you respond?
How do you or your company respond to new ideas? Does your executive team hold “Ideation sessions” regularly? Do you do team huddles and review all aspects of the business and hold yourselves and the company accountable? Do you celebrate the new?
Do you embrace the thoughts of others? As a leader, it is our job to raise up those around us. To seek new ideas, new processes that make the company better, stronger and more profitable.
I remember an article, “what CEO’s are afraid of”. Number one was imposter syndrome. Supposedly, many executives biggest fear is to be found incompetent. Being a little older, we used to call this “The Peter Principle”. One of the reasons that most innovative companies were never structured as organizational Hierarchies.
I work with more nimble entities. Many times,
these leaders fear risk. They fear the risk of moving to aggressively, deploying too much capital. However, they still take action. I have not encountered this phenomenon till recently.
A friend of mine is “stuck” inside a large company. He was brought in to make changes, yet every suggestion, every proposal, every idea is met with hostility or fear. What do you do when you are the innovation guru, and the C-Suite despises innovation?
Get on the Bus? Where is it going?
I’m a simple guy. I like things simple.
I work in complex environments. I fix broken companies. I help companies grow. In determining best practices, there is simplicity in the complex.
Make stuff, sell stuff. It can really be that simple. Why do things go wrong?
People, and therefore, Companies get mired in processes that do not produce positive results. No matter what your position in a company, ask yourself daily. “Are my actions getting me the results I am looking for”?
Too many times I see management implementing processes that do not achieve the outcome desired. If you need to drive sales (and who doesn’t) are your processes, systems, data and compensation driving the results you want? People do what they get measured and paid for. Many times what they get measured on is not what they get paid for. Therefore the outcomes for each scenario will not generate the results desired. I see this in big companies, and in small. Why? In each scenario, nobody is actively communicating. Sales staff articulate their concerns, middle management is stuck in between, Sr. management is demanding sales, yet adding layers of processes to each segment that doesn’t achieve growth. But everyone is very busy. Very busy and very frustrated.